How to Successfully Settle Student Debt: A Comprehensive Overview

One-time settlement where you pay a lumpsum payment which is lower than the total outstanding amount of the loan. Loan restructuring where your lender agrees to revise either the interest rates or the maturity period, prepayment where you pay off the loan in full before the end of the tenure. 

Some of these actions may have an adverse impact on your credit score but result in potential savings of interest payable and reduce the total outstanding loan. In settling your student loans, the best repayment plans for student loans include the following guidelines that are helpful:

• Pay more than what is due at the end of the month. This way your outstanding loan balance can reduce faster.
  
  
• See if you can pay bi-weekly instead of making monthly payments
  
  
• To ensure that you don’t miss paying any loan instalment, sign up for autopay. This way payments are deducted from your bank account automatically
  
  
• Consider options to refinance high interest student loans and consolidate the loans to make for easier payments and lower interest burden.
  
  
• If you have borrowed from several sources, consider a debt avalanche strategy for loan payments. Under this, the high interest loan instalments are paid off first considerably reducing your debt burden
  
  
• Consider asking your employer for assistance to meet the loan payments
  
  
• There are government schemes like the Central Scheme of Interest Subsidy if you belong to the economically weak category, and education loan repayment assistance from some state governments.
  
  
• Use Income tax rules like Section 80E for interest deduction for calculating the total tax payable.
  
  
• Do better student loan management by avoiding common pitfalls like taking additional loans, missed payments, defaulting without communication all of which can lead to legal action.
  
  
• All these debt solutions and strategies will lead to quick financial stability.